Byravee Iyer
Feb 6, 2015

Why 169 million users will abandon their mobile carriers

SINGAPORE - According to a new study by Dentsu Media, churn rates will continue to rise among mobile phone subscribers, with 169 million users switching carriers within the next 12 to 18 months across Indonesia, Malaysia, Philippines, Thailand, Taiwan and Vietnam.

A study by Dentsu Media aims to understand 'churn'
A study by Dentsu Media aims to understand 'churn'

Out of a combined population of around 560 million, collectively the markets boast more than 705 million users. That translates to a penetration rate of 125 per cent, as one in four mobile users operates a secondary phone for either business or domestic purposes.

The study surveyed the intentions of 1,800 mobile users: 100 users (50 men and 50 women) in each country in each of three age groups: the 20s, 30s, and 40s.

The study results indicate that churn is heavily impacted by image evaluations in four areas: popularity, quality of service, reasonable nature of cost and social connectivity.

Dentsu points out that popularity and quality of service are inextricably linked, as both give users a sense of assurance and connectedness and play an important role when deciding whether to stay with a particular network or move elsewhere.

"Reasonability" in terms of pricing was the key driver behind customers moving to other carriers. While connectivity is an imperative to all customers, paying for it at a reasonable price is equally as important. 

Arguably of most significance, however, carriers that present the perception of ubiquitous connectivity through various social tools—including apps, SMS and other such features—also stand to retain and attract new users, particularly among younger demographics.

Legacy carriers, which have been in the market for many years are seen as being both popular and of high quality, and stand a better chance of retaining customers.

Conversely, challengers are attempting to lure customers away from legacy players by offering competitive pricing and making the most use of social connectivity, making an impression on the younger audience.

As a result, many of the region’s market-leading brands have launched or acquired niche carriers that appeal to age- and gender-specific demographic groups. It is these players that are best positioned to grow in both the short- and long-term, the study noted.

 

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